Copyright Board of Canada gives thumbs-up to “iPod tax”

The Copyright Board of Canada released its decision today on whether iPods and …

Canadians who purchase digital music players and removable memory cards should have to pay an extra tax, according to the Copyright Board of Canada. The decision (PDF) stated that the proposed levy, originally suggested by the Canadian Private Copyright Collective (CPCC), followed the intent of the country's Copyright Act and Parliament and therefore such a tariff could be enacted.

The decision comes after a series of back-and-forth arguments between the CPCC, the Canadian Storage Media Alliance (CSMA), and the Retail Council of Canada (RCC). In February of this year, the CPCC asked the Copyright Board to increase the levy on recordable CDs and to add removable media, such as SD cards, to the list. Also part of that request were iPods and other digital music players. "We'd all like lots of things to be free. But those who create the music deserve to be compensated. When you go and buy an iPod, the retailer gets paid. So you can't say that the people who make the music should get a free ride," CPCC board of directors member David Basskin argued at the time.

The proposal sparked a flurry of motions from the CSMA and RCC arguing against the proposal, saying that Canada's Federal Court had already ruled that such a levy fell outside of the Copyright Act. The groups also said that the Copyright Board did not have jurisdiction to decide on the case either way, but those calls fell on deaf ears and the Copyright Board went ahead with the hearings on the levy in June.

The Copyright Board's decision now not only gives the go-ahead to the "iPod tax," it also makes some worrying statements regarding potential levies on other everyday electronics. As the University of Ottawa's research chair of Internet and e-commerce Law, Michael Geist, observed on his blog, the Copyright Board acknowledged a point brought up by the CSMA that phones and computers could also become leviable because they also happen to have the ability, among other things, to store audio files. "We see no inherent problem with this scenario," reads the Copyright Board's decision. "A thing that is ordinarily used by individual consumers to make private copies should not be excluded from the private copying regime for the sole reason that it has other uses. Indeed, all media that are currently subject to the levy can be used for purposes other than private copying."

If such a levy were to go into law, Canadians who wish to buy iPods, Zunes, and other digital music players will have to pay an extra fee on top of the price of the device simply for having the option of using it as an audio player. But the ruling has far-reaching implications. Essentially, the board is claiming that anything with the capacity to store digital data has the potential to hold music and can be taxed accordingly. Plus, there's the underlying assumption that users are stealing the music they're listening to, which is the purpose of the levy in the first place if what Basskin says is true. Whether the levy will actually be implemented remains to be seen, but worried Canadians should plan their media player purchases soon if they want to avoid paying extra.